Social Advocacy & Politics: Double Charging Big Bandwidth Users

Yes, this column is about social advocacy and politics. No, Net Neutrality is not entirely within the scope of this column. But it is tangentially relevant and it is VERY important to politics, advocacy and social media, so I am going to write about it anyway.

Let’s get my key complaint out straight away: the new FCC rule (under comment period now) and the policy foil to Net Neutrality, generally, is taking advantage of a fundamental misunderstanding shared by too many people and fostered by internet service providers who are looking to make a boat-load of money. The proposed rule is NOT about allowing ISPs to recoup the financial cost they incur when large bandwidth users like Netflix stream their content. It is about ISPs charging Netflix TWICE for the extra bandwidth they use.

Let’s make this clear. When a company like Netflix sets up its service, it buys extra bandwidth to pump out its content. When consumers want to stream video from Netflix or Hulu (or any video content provider), they pay for faster download speeds to accommodate their high-bandwidth consumption. And this happens NOW, under the existing net neutrality rules. Again, companies distributing high-bandwidth content already pay for the extra bandwidth they use and people consuming high-bandwidth content already pay for extra bandwidth to download that content.

That means the proposed FCC rules will allow ISPs to charge high-bandwidth content providers A SECOND TIME for the extra bandwidth for which they and their consumers are already paying.

That is simply ridiculous.

In the past, when big bandwidth using content providers found they were running out of bandwidth, they did one of two things: bought more bandwidth or reduced their bandwidth consumption.

First example: AOL bought more bandwidth when it needed it. Back in the early days, AOL had dreams of becoming a major content producer. It had a significant stash of cash set aide to pay for production studios. But before they invested in those, it made a decision to change its subscription model from a set of fixed monthly hour plans to a $29.95 per month plan for unlimited hours. The response was staggering. So staggering, in fact, that it had to use all that money it had set aside for production studios to buy modems (bandwidth). It was only years later that AOL returned to its dream of producing content when it bought Time-Warner… and that probably killed AOL (or mortally wounded it).

Second example: In its couple first year or so, Twitter was making a name for itself (see, I got back to social media). It had climbed to 14 million monthly users that were all gaga about the platform. And when people go gaga over something, Oprah does a show on it; and that is what she did in April 2009. After Oprah aired her show about Twitter, its traffic popped 43%! In order to address this explosion, Twitter implemented a fix to reduce its bandwidth demand that advocacy and political organizers hate: if you reply to someone (or just start your tweet with @twittername), your tweet is only fed to the intersection of your followers and the named person’s followers. Before Oprah, ALL of your followers got all of your tweets in their timeline. In one fell swoop, Twitter reduced its bandwidth by gobs. And thus, it did not have to pay for all that extra bandwidth.

In both of these examples the ISPs did not take a financial hit. In the AOL example, AOL paid for the extra bandwidth. In the Twitter example, the fix eliminated much of the need for extra bandwidth. And in both cases, consumers who wanted faster access to AOL and Twitter content still had to pay for it… or wait for the content to eventually download.

So now we are watching the FCC consider giving a boondoggle to Internet Service Providers and most of us are sitting here scratching our heads thinking that the ISPs seem to have a point… don’t they? NO THEY DON’T. They want to be allowed to charge a second time for something for which we are ALREADY PAYING.